This blog is going to focus on four events that although independent each significantly impact my current thinking. I hope that the events when viewed together may provide a roadmap for financial service industry professionals, nonprofit charitable organizations, Finseca, CGP and individuals to think about their own situations and how we can work together to ensure a better world for us all.
In a July 3 Finseca email Mark Cadin, the president of Finseca, the nation’s preeminent organization of life insurance agents and financial professionals, sent out a video link to his discussion with Phil Ferrari of EY. The focus of the video and the text that accompanies it was the proven need to plan HOLISTICALLY for financial success in order to maximize positive outcomes for clients. This EY study first published in 2021 confirms that life insurance and annuities provide diversification of assets that outperform other investment portfolios and is a shot in the arm for the life insurance industry as they continue to serve the best interest of their clients.
EY is one of the nation’s largest and premiere accounting firms. EY is not part of the life insurance industry and is an unbiased auditor of investments portfolios. The data is the facts. The facts unequivocally demonstrate the need for investment professionals to diversify the portfolios of their clientele to include insurance and annuities. The EY 2024 follow up study confirms this need for clients to include life insurance and annuities to maximize positive outcomes in their investment and retirement portfolio. I encourage all financial planners to make sure they have this study and share it with as many clients and individuals as possible. Finseca‘s goal is financial security for all, and that can only be achieved by educating people on the best way to achieve financial security. Hats off to EY for their investigative research and publishing their findings. Kudos to Finseca for promoting this seminal paper and encouraging its thousands of members to engage their clients in the necessary planning.
That being said, there was in my mind a significant HOLE in the conversation about HOLISTIC planning. I believe one can NOT holistic plan absent a full-throated review of the individual’s and their family’s philanthropic ideals. To do so is missing out on one of the most important decisions an individual or family makes. Not having the philanthropic discussion also hurts the financial services professional and the industry. The Bank of America study, which is done annually, concludes that only one in five individuals are willing to discuss their financial plans, their wealth, or their estate plan with the next generation. Contrast that with the four in five individuals (80%) that are willing to discuss with the next generation their philanthropic ideals and their life story. This opportunity to engage the next generation and bring the family together allows the financial professional increased sales opportunities and clients increased satisfaction with their financial plan. It is a known fact that philanthropy and the positive impact it makes on the community reverberates not just to the recipient of this generosity but more importantly this generosity also bounces back to the philanthropist. That awesome feeling an individual gets from doing good works is it an endorphin rush that has been documented in study after study. Further it is a legacy that survives the individual and engages the family in a common goal.
Everyone leaves a legacy. Philanthropy is one significant part of an individual’s legacy that Finseca’s membership should all be actively engaged in helping their clients fulfill. Life insurance is a $21+ Trillion asset class that is often overlooked and grossly underutilized for charitable giving. It is time for Finseca to step up and ask more of their membership. I offer my assistance.
That segways seamlessly into the next event I wish to focus on, the national charitable gift planning conference. I attended this conference in Orlando at the end of October. This was my eighth national conference and our charity, Insuring A Better World Fund, has exhibited at 5 or 6 of these conferences. CGP is the national organization of charitable planned giving professionals, a remarkable group of highly educated and passionate individuals. I always leave these conferences excited about the opportunities for all to work together to benefit so many in fields ranging from education, religion, poverty, hunger, health and more.
One breakout session led by Dr. Russell James who uses medical science to gather data to measure the impact of philanthropic marketing, as well as a number of other important issues. I encourage all those reading this to visit Dr. Russell James’, of Texas Tech University, YouTube videos as this will greatly enhance your knowledge and refocus your marketing efforts to better serve charitable donors and financial planning clients. The gathering in Orlando incidentally included the best chicken meal of any of the nearly 100 large scale conferences that I’ve attended to date.
The annual conferences are a great way for people to work and share their thoughts and ideas in the planned giving space of charitable organizations. I am always struck by the positive impact that individuals can make and feel privileged to be able to associate with this group, all trying to better the world through the myriad of charitable organizations they work with. Breakout sessions on marketing and gift planning techniques are a staple of this conference. The opportunity to meet with vendors and other like-minded organizations provides inspiration to those that attend.
However, I also know that this conference continuously falls short in providing the necessary tools to maximize the impact of the charitable organizations that attend+. It falls short because for over a decade there has been no breakout session or discussion of the use of life insurance in philanthropy. Further the vendors that attend the conference who specialize in marketing and donor engagement, all are lacking in outreach regarding gifts of life insurance.
The national conference decision-makers, consultants and charitable organizations site numerous, albeit lame, reasons for this purposeful oversight. At this conference, I heard from nonprofit organizations about the low response rate that charities receive when engaging in an outreach or marketing campaign that targets the use of life insurance. That’s one excuse. I also heard that charities lack the expertise and administrative capabilities to deal with gifts of life insurance. That’s a second excuse. I also heard that charities don’t wish to have an association with a particular financial planner so as not to offend all other financial planners that may also wish to engage with the charity, that’s a third excuse. None of these excuses are significant enough to stop a charity from meeting their potential donors where they are and maximizing the gift opportunities for the constituency their charitable mission is to serve. Each of these excuses is easy to work around and that is why a breakout session is so important for the national conference to pursue so that charitable organizations are given the tools to meet their donors where they are and access the 21+ trillion-dollar life insurance asset class for philanthropic gifts. Nearly 9 in 10 life insurance policies lapse without paying a death benefit. Last year alone nearly $200 billion in the senior market alone were potential gifts to charity. In short, there is no reason that I have found in my 40 years in the financial planning space and nonprofit space for these two massive industries not to collaborate and achieve outcomes that are beneficial to both, and most importantly, serve the clients and donors that it is incumbent upon us to work on behalf of.
Here I will detour slightly from the natural order and rhythm much like a Grateful Dead song and return for a strong finish.
On November 5, as I’m sure all are aware, there was a presidential election. No matter what your politics, the election is over. Decisions have been made and we are all citizens of the same country. It is in our best interest to find ways to work collaboratively to find solutions to the many problems facing individuals and the country. We are not all in the same position and it is that uniqueness of personality and circumstance that makes solutions difficult to find and also makes uniformity impossible. This does not mean no decisions should be made and in fact no decision is a decision.
One party is now in control of the Presidency, the Senate and the House of Representatives. This is not an unusual occurrence. I am hopeful that this does not portend coming years of one party running roughshod over the other and legislating with the intent to do harm as opposed to raising all boats in an effort to do good by all. I am optimistic that this can be achieved. There are many areas where people of both parties agree on the desired outcome, although they may disagree on the proper to achieve that outcome. Most of the news media and social media are focused on the potential pitfalls and conflicts that are certain to arise. I choose to remain optimistic. I look around and see a world full of new potential and exciting opportunities. The advent of AI no doubt has challenges, and I am not one who believes it will provide a solution to all our evils and challenges. However, AI does hold out promise in almost every arena to make our lives easier, more efficient and produce better outcomes. That is my hope for the new President and his second term as well as the Congress. There is tax policy, immigration, education, and a host of foreign affairs issues to tackle. Let us all work together where possible and accomplish positive outcomes for the country and most importantly much like the Hippocratic oath of a physician, let’s treat each other with respect and do no harm.
With all these daunting issues in front of us, there is legitimate cause for concern. In a matter of a few short years, those aged 65 and older will for the first time in this nation’s history outnumber those that are 21 and younger. On November 2, my daughter, Molly, and her husband Ari welcomed our first grandchild Shaya into this world. There is nothing like holding a newborn to fill your heart with love, hope and optimism. I cannot say what the world will look like as Shaya grows older. I can only hope that the world of tomorrow is better than the world of today. As I walked her around in the middle of the night looking into her beautiful blue eyes I saw a world of possibilities, hopes and dreams.
It is exactly how I felt some 30 years ago when our daughter Molly was born. I am filled with renewed commitment to do all I can to help her fulfill her destiny as she chooses. My cofounder, Robert, and I founded the Insuring A Better World Fund about a decade ago. Each of us had achieved significant success in the insurance industry and wanted to cement our legacy not just with the clients that we were fortunate enough to serve, but also to make a greater impact on the industry and society. Insuring A Better World Fund’s mission is to increase gifts of life insurance to charitable organizations and to strengthen the relationship between the insurance industry professionals and nonprofit organizations. In short, it is to let the charitable organizations utilize financial planners to meet donor/clients where they are and use life insurance as a tool to help fulfill philanthropic ideals. Our mission is to ensure a better world for us all, which now includes Shaya. Happy Thanksgiving and I hope everyone has a wonderful time with friends and family.